Good Times is going all in on its Bad side.
Golden-based Good Times Restaurants Inc. plans to pay $21 million to acquire the 52 percent of burger bar operator Bad Daddy’s International it does not already own, officials announced Tuesday.
Good Times previously acquired a 48 percent stake in the North Carolina-based Bad Daddy’s franchise business and inked an agreement for the rights to develop Bad Daddy’s Burger Bar restaurants in Colorado, Oklahoma and Kansas.
Under the agreement announced Tuesday, Good Times acquired all the membership interests in Bad Daddy’s International LLC along with the company’s assets, making the upscale burger bar chain a wholly-owned subsidiary. Bad Daddy’s has locations in Denver, the Carolinas and Tennessee.
In a regulatory filing made Tuesday, Good Times officials said it would be able to develop additional Bad Daddy’s Burger Bar restaurants without material geographic limitations.
“When we first got involved with Bad Daddy’s approximately two years ago, we were excited about the potential for the brand and had certain first rights of offer to acquire it,” Boyd Hoback, Good Times’ president and chief executive officer, said in a statement. “Since then, the performance of the Bad Daddy’s restaurants we have opened and those in which we will be acquiring an interest has confirmed our original enthusiasm.”
The $21 million purchase price consists of $18.5 million in cash and a one-year promissory note for $2.5 million to Bad Daddy’s International.
Bad Daddy’s restaurants, on average, have annual sales of $2.7 million and carry an average per-person check of $16. The average ticket at Good Times’ fast-foods restaurants is $6.50, officials said.
Good Times had more than $11 million in cash as of Dec. 31, 2014.
To help fund the deal, Good Times on Tuesday also announced plans to sell up to 2.375 million shares of its common stock in a public offering. Good Times has granted underwriters an option to purchase up to 356,250 additional shares, officials said.
Janney Montgomery Scott and Stephens Inc. are joint book-running managers and Dougherty & Company LLC is serving as the offering’s lead manager.
Shares of Good Times Restaurants (Nasdaq: GTIM) closed at $8.29 on Monday.
Alicia Wallace: 303-954-1939, awallace@denverpost.com or twitter.com/aliciawallace
